Australian dairy consumption expected to rise - GAIN

The majority of this growth is due to high immigration
calendar icon 12 December 2024
clock icon 3 minute read

The USDA Foreign Agricultural Service post in Canberra forecasts a 0.4% increase in Australia’s fluid milk consumption for 2025, reaching 2.47 million metric tons (MMT), up slightly from a revised estimate of 2.46 MMT for 2024, according to a recent US Department of Agriculture (USDA) Global Agricultural Information Network (GAIN) report

This marks a reversal of the declining trend over the previous five years, where fluid milk consumption generally dropped by around 1% annually. The shift is primarily due to rapid population growth since the beginning of 2023.

Australia’s population growth rate has surged beyond the steady pre-COVID-19 rate of just over 1.5%. From late 2022, the growth rate has consistently exceeded the pre-pandemic average, reaching an annualised rate of approximately 2.3% by the first quarter of 2024. The majority of this growth is due to high immigration, although the federal government has since implemented measures to slow the immigration rate. However, the strong growth through 2024 will continue positively influencing overall fluid milk consumption into 2025.

Despite the forecasted increase in milk consumption, per capita consumption is expected to continue its decline at a rate similar to previous years. 

Over the past five years (2019–2023), per capita milk consumption has consistently dropped by around 2% annually. For 2025, a population growth rate of 1.75%, (in line with the government’s goal of reducing immigration) is projected to increase to approximately 475,000 people. However, this population growth, combined with overall consumption, is expected to lead to a 1.5% decline in per capita consumption, consistent with the estimate for 2024.

There has been notable growth in the consumption of milk substitute products such as soy, almond, oat, and rice milk. As the range of plant-based milk substitutes has expanded, so has consumption in this
sector. However, data from the Australian Bureau of Statistics (ABS) shows that per capita consumption of milk substitutes peaked in 2021/22 and fell by seven percent, or nearly 0.5 litres per person, in 2022/23. This decline in milk substitutes may contribute to the slowdown in milk consumption, reducing the annual drop from around 2% to an estimated 1.5% for 2024 and 2025.

Despite the decline in per capita consumption, fluid milk remains a staple in Australia, with consumption expected to represent 28.1% of national milk production in 2025. Per capita consumption remains high by global standards, although it is forecast to decrease from 100 litres per person in 2019 to 89 litres per person in 2025.

Full-fat milk continues to be the most consumed category, accounting for 59% of total milk consumption. Over recent years, this has increased at the expense of reduced-fat, non-fat, and UHT milk varieties. Flavoured milk now makes up almost 10 percent of overall drinking milk consumption, showing modest growth in recent years.

FAS/Canberra’s 2024 milk consumption estimate has been revised upward by 0.2% to 2.46 MMT, reflecting a 0.7% increase from 2023. This marks a departure from the previous trend of declining
fluid milk consumption, driven by robust population growth in 2023, even though per capita consumption continued to decline.

Factory milk consumption for 2025 is forecast to reach 6.20 MMT, up from the revised estimate of 6.09 MMT for 2024. This 1.8% increase in manufactured milk consumption is closely tied to the forecasted rise in overall milk production. The 2024 factory milk consumption estimate has been revised down slightly by 1% from the previous estimate of 6.15 MMT due to the upward revision of fluid milk consumption and a modest downward revision of milk production for the same year.

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